Determinants of Competitiveness of the Swaziland Sugar Industry

Abstract

The issue of abolishment of trade agreements preferences pose a great threat to the sugar industry in Swaziland. Using both the Relative Trade Advantage and Porter`s 1990 National Diamond concept, the major objective of the study was to examine the comparative advantage of the sugar industry in the global market with the aim of establishing the contributing factors and constraints to the competitiveness of the Swaziland sugar industry. The Relative Trade Advantage (RTA) method developed by Balassa was used to determine Swaziland global comparative advantage of the sugar industry. The study found that the Swaziland sugar industry had a relatively highly comparative advantage in the global market in terms of producing sugar. The results from the regression model indicated that global sugar market prices, exchange rate and export values had a significant influence on the Swaziland Relative Trade Advantage indices. The Porter`s (1990) National Diamond model analysis revealed factors that enhance competitiveness of the sugar industry include compensation of management, business approach to human resource, relationship and networking, telecommunication and internet service, availability of credit and availability of unskilled labour as well as production of high quality products. Some factors that have a major constraining effect on the competitiveness were the small local market size, cost of financing business, cost of transport, cost of supply of inputs, public sector effectiveness on service delivery and exchange rates. Therefore, the government in consultation with the industry representatives should consider development and implementation of an industry policy Journal of Agricultural Studies

Trade and competitiveness of African sugar exports

“…As noted by Ngcobo and Jewitt (2017), this can be attributed to inflows of FDI and its role in technological spillovers, increased investment in infrastructure and adoption of efficient methods of production, which in turn can enhance a country's competitiveness in the sugar export market. This observation is also supported by Nyanzunda (2012) who further opines that that technological advancements that come with FDI increase productivity, enhance access to markets with high returns and play a pivotal role in determining the competitiveness of the sugar industry. Sugar production is a capitalintensive business venture that needs investments to maintain a given level of competitiveness (Galović and Bezić, 2019).…”

“…For instance, most African countries have a potential to enhance their competitiveness on the international market given their favorable climatic conditions for growing sugar and availability of land and other natural resources (Hess et al, 2016). Additionally, trade barriers, changes in government policies and regulations that enhance productivity can also significantly affect the competitiveness of commodities on the international market (Srivastava et al, 2006;Nyanzunda, 2012;Bouët et al, 2021). These factors can create opportunities or challenges for industries and countries to maintain or improve their comparative advantage in the global market.…”

Effect of Product Differentiation Practice on Performance of Sugar Companies in Western Kenya

“…Kitching, Blackburn, Smallbone and Dixon (2009), with a study on firms in the United Kingdom, established that strategic adaptation under challenging times resulted in improved performance. A study by Ndlangamandla (2016) in Swaziland revealed that sugar companies in the country were recording high performance relative to their competitors due to their effectiveness in adapting to the sugar market. A study by Imbambi (2017) on sugar companies in western Kenya also established that technological and material capabilities as part of the companies' strategies resulted in high performance.…”